A sale agreement for land in Kenya is a crucial legal document that outlines the terms and conditions for the sale of real estate. Whether you are a buyer or a seller, understanding the features, necessities, and legal requirements of a sale agreement is essential to ensure a smooth and lawful transaction.
Also, by law, any sale of land has to be in writing.
This article will delve into the key aspects of a sale agreement for land in Kenya, highlighting its features, the requirements specified by the Law Society of Kenya, and the relevant laws governing such agreements.
Features of a Sale Agreement for Land
- Identification of Parties: A sale agreement must identify the parties involved – the seller and the buyer. The full legal names and addresses of both parties should be clearly stated.
- Description of the Property: The agreement should provide a detailed description of the land being sold, including its physical address, measurements, and any landmarks that can help identify it. It’s important to use the official land reference number as well.
- Purchase Price: The agreed-upon purchase price should be clearly specified in the agreement. This amount must be precise and in the local currency (Kenyan Shillings).
- Payment Terms: The agreement should outline the payment terms, including the down payment (if any), the schedule of subsequent payments, and the mode of payment (e.g., bank transfer, cheque, or cash).
- Deposit: The agreement may specify an earnest money deposit to secure the sale. The amount and the conditions under which it may be forfeited or returned should be clearly stated.
- Closing Date: The agreed-upon date for the completion of the sale, also known as the closing date, should be indicated in the agreement. It may also include provisions for any extensions.
- Title Deed and Ownership: The seller must confirm that they are the legal owner of the property and possess a valid title deed. Any encumbrances or restrictions on the property’s ownership should be disclosed.
- Warranties and Representations: Both parties may include warranties and representations. Sellers may provide warranties about the condition of the property, while buyers may represent their financial capacity to make the purchase.
- Access and Possession: The agreement should specify when the buyer will have access to the property and take possession. This is essential for sellers who need time to vacate the premises.
- Conditions and Contingencies: Any conditions or contingencies that need to be satisfied before the sale can proceed should be outlined. For example, the buyer may require a satisfactory inspection of the property.
- Default and Remedies: The agreement should detail the consequences of default by either party, including any applicable remedies or penalties.
- Dispute Resolution: The method for resolving disputes, such as arbitration or litigation, should be indicated. This can help avoid costly legal battles.
Necessities in a Sale Agreement for Land
- Legal Counsel: It is advisable for both parties to seek legal counsel before entering into a sale agreement. A lawyer can ensure that the document complies with Kenyan law and protect the interests of their clients.
- Witnesses: The agreement should be signed in the presence of witnesses who can attest to the authenticity of the signatures.
- Signatures: The sale agreement must be signed by both the buyer and the seller to make it legally binding. The parties’ advocates also need to sign and certify by stamping the documents.
- Stamp Duty: The agreement should be properly stamped as required by the Stamp Duty Act to be enforceable. The rate of stamp duty varies based on the purchase price.
- Date of Execution: The date and place where the agreement is executed should be included to establish its validity.
- Copies: Both parties should have signed copies of the agreement for their records. It is common practice for such agreements to be prepared and attested in triplicate, such that should there be a third party involved, such as a financier, they can also retain a copy of the agreement.
The Law Society of Kenya’s Guidelines
The Law Society of Kenya (LSK) provides guidelines, known as Conditions of Sale, for the preparation and execution of sale agreements for land. While these guidelines are not legally binding, they serve as best practices for legal professionals and parties involved in land transactions. Some key LSK guidelines include:
- Conflict of Interest: Lawyers should avoid conflicts of interest, and both parties should have independent legal representation.
- Verification of Ownership: Sellers should provide clear evidence of title, such as the title deed, and buyers should verify the title’s authenticity.
- Disclosure of Material Facts: Sellers should disclose all material information about the property, such as known defects or encumbrances.
- Payment Records: Payments, especially large sums like earnest money, should be properly documented and verified by both parties.
- Non-Refundable Deposit: The buyer usually forfeits any deposits they make should they delay, or renege, on the agreement.
Relevant Laws Governing the Sale of Land in Kenya
- Land Registration Act, 2012: This Act governs the registration of land in Kenya, including the transfer of title and the rights and responsibilities of landowners.
- The Law of Contract Act, Chapter 23: This Act outlines the basic principles of contracts, which include sale agreements for land.
- The Land Act, 2012: This Act covers the rights and obligations of landowners, including regulations on land transactions.
- Stamp Duty Act, Chapter 480: This Act specifies the stamp duty rates applicable to various documents, including sale agreements.
- The Law Society of Kenya Conditions of Sale: These conditions provide the guidelines through which advocates can conduct the sale of land.
Conclusion
Before you buy any amount of land, it’s always imperative that you retain counsel to help guide you through the process, and also protect your rights and interests before, during and after the transaction takes place. We’d love to be of service to you in this regard. If you’d like to know more, simply get in touch with us. We’ll h
